Driving Factors of Smart Grids

According to the recent research by Powel company in Norway, the majority of European utilities consider technology as a main driver for Smart Grids [9]. Table 2 provides an overview of the main driving factors for Smart Grids [8]:

Table 2 An Overview of main driving factors for Smart Grids Technology Advancement

 Smart Grid can be seen as the convergence of IT, telecom, and energy markets

 New products and solutions through technology advancement

 Significant amounts of venture capital investment in Smart Grid technologies and solutions

Higher Efficiency With the Help of Grid Optimization

 Multiple integration points for intelligent grid hardware and software from transmission to consumption

 Embedded sensors and monitoring capabilities

 Deployment of advanced two-way communications networks

 Growing Supply of Renewable and Distributed Power Generation and Storage

 Network and systems architecture to support many forms of distributed generation and storage

 Intelligent support for multiple forms of intermittent renewable power sources (centralized and/or distributed)

Advanced Customer Services

 Robust, simple consumer energy management platforms

 Networked devices within the "smart home"

 New, efficient pricing models for electricity usage Infrastructure Reliability and Security

 Networks/systems tolerant of attack or natural disaster

 Ability to anticipate and automatically respond to system disturbances 21st Century Power Quality

 Delivering power that is free of sags, spikes, disturbances and interruptions

Additionally, new energy conservation technologies are needed for Smart Grids. As such technologies may reduce the need for reserve power plants and can cut the costs of power failures. Energy conservation technologies may also help to smooth out the variability of renewable energy generation, such as wind and solar.

Another driving factor of Smart Grid is the new 'smart' way of energy use. It implies energy resource optimization (e.g. own generation or distribution grid), as well as optimization of time of use (e.g. avoiding peak hours usage). The new grid should also be environmentally friendly and economically viable.

Additionally, the regulators in Europe and United States have been one of the leading drivers of Smart Grid. A lot of research and development projects regarding Smart Grid implementation are going on at the moment. Both government and private companies invest into these projects nowadays.

2.2.1 Power Quality

Nowadays people are very dependent on electricity. It is indispensible part of their lives. Not only it is now critical to have reliable power supply, but the power quality needs to be sufficient to support modern demands of the digital life.

Grid operators today are mainly focused on the outages of electricity, rather than power quality issues. But it may soon change as the regulators create more strict rules, regarding power quality. Without the proper power quality, an electrical device can malfunction or not operate at all. With all our data centres, cellular networks and medical equipment, it is easy to realize that having reliable power quality is almost as important as having power itself.

2.2.2 Safety

Safety is an important factor in Smart Grids. As systems rely more and more on sophisticated hardware and software, safety is increasingly dependent on the intercommunication between systems and their responses to inputs. Functional safety

depends on equipment or a system, operating correctly in response to its inputs. It is the part of the overall energy system safety. Functional safety includes:

 Software

 Hardware

 Electromagnetic Compatibility

 Safety management

Functional safety aims to minimize the risk of physical injuries or damaging health of people (directly or through the environment). Making our electricity grid safer is, without any doubts, a driving factor for a change to a smarter grid. Refer to Appendix I for a list of functional safety standards [10].

2.2.3 Energy Independence and Security of Supply

Energy independence is high on political agenda [11]. Import supply of gas and other resources for energy generation from foreign countries has proved to be unreliable.

That is why it is important that a Smart Grid would support self-sufficiency. That can be done by optimizing energy use (demand response) and increasing energy generation from renewable resources as well as distributed generation.

Case Example:

Electric vehicles are sometimes viewed as a solution for reducing dependence on foreign energy as they do not use oil imported from foreign countries. However, this technology can’t realize its purposes without having an underlying Smart Grid. For example, Advanced Control System and communication network, which is a part of intelligent grid will be able to charge electric vehicles without causing ‘accidental peaks’ that can be created as a result of thousands of household charging their vehicle after work.

2.2.4 Increasing Renewable Energy Generation

Without introducing Smart Grids, renewable power sources will stay niche. Both customers and utility will benefit from a true integration of renewable energy generation into conventional grids. This integration need to be properly done in a way that is not only advantageous, but also not disruptive.

A lot of European countries are now racing towards ‘20/20/20’ goal: a 20% cut in emissions of greenhouse gases by 2020, compared with 1990 levels; a 20% increase in the share of renewable sources in the energy mix; and a 20% cut in energy consumption. Introduction of Smart Grids will not only help to achieve this goal, but also promises to provide additional energy storage possibilities. Energy storage issues are further discussed in section 2.3.2 of the thesis.

2.2.5 Technology Development

Some of technologies that enable Smart Grids are available on the market today. Smart Grids will move the utility industry into the information age as the information about energy consumption, generation, distribution and storage will become available in the real-time.

Until today, the electric utility industry has lagged behind other industries in taking advantage of the modern communication and networking technologies. Therefore, first steps towards introducing Smart Grids will not be ‘creating new technologies’, but introducing the technologies of today. The Figure 5 shows the proposed evolution of Smart Grids:

Figure 5 Steps towards Smart Grid

2.2.6 Energy Demand

Global energy demand is expected to soar 44% by 2030 (see Figure 6) with most of the demand coming from developing countries such as China, Russia, India, and Brazil.

Figure 6 Energy Demand Forecast [12]

However, EU countries will also be affected by a global energy demand increase. The electricity prices are constantly rising. Therefore, alternative energy resources should be considered. And the market should adapt for the new technologies.

Smart Grid platform supports both direct and indirect energy efficiency efforts.

Advanced Metering Infrastructure promises to provide control centers with real-time information about consumption. This will significantly improve the operational efficiency of the distribution grid and allow for energy-efficient applications such as Demand Response to be enrolled at full scale.

2.2.7 Peak Levelling and Time-of-use Pricing

In order to reduce demand during the peak usage periods when the price of electricity is very high, communications and metering technologies inform smart devices, installed at homes or in the offices, when energy demand is high. These devices in turn track the amount of used electricity and log the time of its use.

To motivate customers to cut back their energy use and perform so-called peak levelling, prices of electricity are increased during high demand periods, and decreased during low demand periods. It is expected that consumers and business will tend to consume less energy during peak time if it possible for them to be aware of high price premium for using electricity during the peak periods. For example, some families may decide to cook dinner at 9pm instead of 5pm.

It is thought that such policies will reduce the amount of spinning reserve that electric utilities have to keep on stand-by. The load curve will level itself through a

The Figure 7 provides an overview of the applications of the Smart Grids:

Real Time Energy Markets

Application Data Flow to/from End-User Energy Management Systems Application Data Flow for PHEVs

Advanced Demand Maintenance and Demand Response; Load Forecasting and Shifting

Remote Meter Reading, Remote Disconnect/Connect, Theft Detection, Customer Prepay, Mobile Workforce Management experienced by end-customers. It encourages consumers to reduce their electricity